A Key Disincentive Effect of Departmental Cost Allocation Can Occur

question 51

Multiple Choice

A key disincentive effect of departmental cost allocation can occur when:

• A)Allocated costs are less than external purchase costs
• B)Managers do not understand the incentives in the allocation base
• C)The allocation base is actual usage
• D)The allocation base is budgeted usage
• E)The allocation base is greater than usage

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Definitions:

Cohabitate

The act of living together and sharing a living space by non-married individuals, often in a romantic relationship.

Breakup Rate

The frequency or likelihood of relationships ending over a specified period, often used in the context of romantic partnerships.

Same-Sex Couples

Relationships involving two individuals of the same sex, either legally recognized as a marriage or akin to marriage.

Heterosexual Couples

Pairs of individuals of the opposite sex who are in a romantic and/or sexual relationship with each other.